Durbin, Grassley Statement On GAO Report On Prescription Drug Advertising's Impact On Medicare Spending

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Chuck Grassley (R-IA) today released the following statement after the Government Accountability Office (GAO) released a report they had requested entitled, “Prescription Drugs: Medicare Spending on Drugs with Direct-to-Consumer Advertising,” which found direct-to-consumer (DTC) advertisements of prescription drugs drive drastic increases in Medicare costs:

“This GAO report found that Pharma’s $6 billon annual spending spree on TV, magazine, and internet advertisements for the newest and most expensive drugs balloons Medicare’s costs. Drugs that are advertised direct-to-consumer accounted for nearly 60 percent of Medicare’s medication budget. GAO documented Pharma’s tried and true scheme: America’s seniors are being targeted with ads for expensive medications without disclosing the price of the drug, then Medicare spending is inflated to the tune of tens of billions of dollars each year.  We plan to introduce new legislation to bring transparency to Pharma’s unfair drug advertising practices by requiring the disclosure of the product’s cost, which will lower drug spending and empower patients.”

Below are some key findings from the GAO report:

  • Pharmaceutical manufacturers spent approximately $6 billion for each of the years 2016-2018 on DTC drug advertisements (increasing spending each year over year), half of which was concentrated among drugs that treat chronic conditions of arthritis, diabetes, and depression.  Virtually all spending was for more expensive, brand-name drugs.
  • Two-thirds of this spending ($12B out of $18B total) over this three-year period was concentrated on just 39 drugs, half of which had newly entered market.  For each of those 39 drugs, their manufacturers spent over $100 million to run commercials.  Humira was the highest-advertised drug, with $1.4 billion in DTC spending during 3 year window – followed by Lyrica ($913 million), and Trulicity ($655 million).
  • During this three year period, Medicare spent a total $560 billion on drugs, and 58 percent were on drugs that were advertised. 
  • Advertised drugs accounted for 8 percent of total Medicare Part D drugs used but 57 percent of that spending.
  • Among the top 10 drugs with the highest cost to Medicare, four were also in the top 10 for advertising spending (Humira, Eliquis, Keytruda, Lyrica).

For years, Durbin and Grassley have advanced legislative proposals to require pharmaceutical companies to disclose the list prices of their prescription drugs when choosing to run DTC advertisements, including passing a bipartisan amendment through the Senate in 2018.  Studies show that the average American sees nine DTC ads each day—which steer patients to the most expensive drugs regardless of whether it is clinically appropriate for a patient or if a lower-cost generic is available.